Microeconomics Elasticity Quiz

What is price elasticity of demand?

• Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good or service to a change in its price.

• Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good or service to a change in its income.

• Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good or service to a change in its quality.

• Price elasticity of demand is a measure of the responsiveness of the quantity supplied of a good or service to a change in its price.

How is price elasticity of demand calculated?

• Percentage change in price divided by percentage change in quantity demanded.

• Percentage change in quantity demanded divided by percentage change in price.

• Total revenue divided by quantity demanded.

• Percentage change in quantity supplied divided by percentage change in price.

What does a price elasticity of demand greater than 1 indicate?

• Unitary demand.

• Inelastic demand.

• Perfectly elastic demand.

• Elastic demand

What does a price elasticity of demand less than 1 indicate?

• Elastic

• Unitary

• Perfectly elastic

• Inelastic

What does a price elasticity of demand equal to 1 indicate?

• Perfectly elastic

• Perfectly inelastic

• Unitary elasticity

• Elasticity greater than 1

What is cross price elasticity of demand?

• Cross price elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good.

• Cross price elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the quantity supplied of another good.

• Cross price elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the income of consumers.

• Cross price elasticity of demand measures the responsiveness of the quantity supplied of one good to a change in the price of another good.

How is cross price elasticity of demand calculated?

• Percentage change in quantity demanded of one good divided by the percentage change in price of another good.

• Percentage change in price of one good multiplied by the percentage change in quantity demanded of another good.

• Percentage change in quantity demanded of one good multiplied by the percentage change in price of another good.

• Percentage change in price of one good divided by the percentage change in quantity demanded of another good.

What does a positive cross price elasticity of demand indicate?

• Inferior goods

• Substitutes

• Complements

• Independent goods

What does a negative cross price elasticity of demand indicate?

• Substitutes

• Complements

• Perfectly elastic

• Independent

What is income elasticity of demand?

• Income elasticity of demand measures the responsiveness of the quantity demanded of a good or service to a change in population.

• Income elasticity of demand measures the responsiveness of the quantity demanded of a good or service to a change in price.

• Income elasticity of demand measures the responsiveness of the quantity supplied of a good or service to a change in income.

• Income elasticity of demand measures the responsiveness of the quantity demanded of a good or service to a change in income.